Posts Tagged ‘Optifreeze’

In this post, CESI will touch upon general global frozen food business metrics – innovation as the key driver, the dominant players and the outlook.

“Development of advanced freezing technologies have enabled efficient preservation of the nutritional value of fruits and vegetables for longer times, have reduced material losses and have resulted in longer product shelf life. All of these factors have helped boost popularity of frozen fruits and vegetables among consumers. Given, the dynamic and intensely competitive market environment, product innovation ranks as a key to success in the marketplace.” (Frozen Fruits and Vegetables – A Global Market Perspective  – PR Newswire)

Advancements in freezing technologies is fueling the growth for frozen fruits and vegetables, which allows the manufacturers to preserve the nutritional value of the vegetables and fruits for a longer time period and in some cases restore key nutrients once lost using prior freezing processes.” (by foodproductdesign)

Nestlé Invests $53M to Focus on Frozen, Chilled Foods: “Nestlé S.A. will invest $53 million to establish a new building that will expand the existing R&D facility in Solon. The new center will be designated as a global Product Technology Center (PTC), dedicated to frozen and chilled foods research, and will serve Nestlé’s businesses worldwide. Construction is expected to begin this summer with plans for the facility to be operational in late 2014. The glass-faced facility located on 18 acres will house offices and labs for approximately 100 scientific, professional and technical staff. The 144,000-square-foot building also will include a pilot plant where new recipes and the latest technologies will be tested and evaluated.”

Not surprisingly, the first announced Optifreeze partner Orkla and its broad pipeline (62.8 Billion NOK Market Cap) also strongly drives innovation:

“Innovation is Orkla’s primary tool for creating growth, and is therefore pivotal to the way Orkla is run.”

“In the coming years, Orkla’s focus on innovation will remain its first priority, and all employees will work continuously to ensure that local brands are consumers’ first choice by making them a better, simpler and healthier part of everyday life.”

Optifreeze is true innovation and the key issue,  a possible (or non possible) scale-up of the Optifreeze technology, now seems eliminated:

“New year means new opportunities. 2015 will be just as eventful as last year and it feels more stable as we make progress on several fronts. Let me mention four key strategic areas.

The Company’s method developers are working to broaden and deepen our knowledge of more and more products. Eda, Rei, and Kasia has tested a range of vegetables, fruits, berries and herbs for us to develop a product map, that is, to find out which products can easily be treated with our method and who works less. This work is coordinated with the next area.

Companies that sell fresh and frozen herbs have shown interest in the OptiFreeze technology.

Secondly, together with Orkla we have started preparations (panels and focus groups) for the planned market tests. The goal is to conduct these tests in the first half of 2015. Optifreeze will also conduct its own market analysis in order to define which products that have great acceptance in the global food market, not least in order to identify the products that have the potential to provide good revenues. The goal is to broaden and deepen the knowledge of the various markets and companies we will process. In the current situation, we have good indications of products that can provide the company with good revenues in the short and long term. It has also become evident in the various industries and sectors that OptiFreeze will find customers and partners. Examples of these are food industries that produce foods, companies providing fresh frozen products, refrigeration technology and bakery and also confectionery companies producing desserts and cakes.

Optifreeze has received and constantly receives requests from companies around the world with the desire for collaboration. We are likely to initiate collaborations with partners in 2015, but only on condition that it fits into the company’s strategy.

A third area is the up-scaling and industrialization of the technology. The first steps we took last fall. And I’ll admit that it was with a certain nervousness and high pulse, I viewed how the treated products were placed on a production line and subsequently transported into an industrial freezer and frozen to below minus 20 degrees. After a few seconds, the products came out the other end of the freezer. To our great delight, we found that the products survival rate was high and reached by a wide margin up to the demands of the food industry. Hence, we live up to our motto “we have a technology that enables the taste, shape and structure can be maintained throughout the freezing and thawing process.” This shows that we are on the right track. Our technology opens up entirely new niches, product groups and markets as we work strategically to broaden and deepen OptiFreeze.” source link (in Swedish)

Structure of the freezing industry
Freezing industry can be divided into two segments. One part consists of companies that specialize in individual freezing of vegetables, fruits and berries. This Business is often located near the major cropping areas. Several large such companies are located in Belgium and the Netherlands has specialized in vegetables and potatoes. These Businesses usually offer standard and customized product mixes. For example,  strawberries used in Sweden are often frozen in Egypt or Poland. In Sweden we have e.g. Magni Hill in Mörarp, cultivating and freezer your vegetables. Polarica in Haaparanta as sells frozen wild berries such as e.g. lingonberries. Polarica also owns a company in Poland as deep freezer your strawberries, raspberry and black currant. Nordic Food Group own several production of berries in Sweden, Bosnia and Latvia. The second part consists of brand manufacturers which offers a large selection of branded goods. These often belong to different international groups. Examples are Findus and Procordia (Orkla group), while Dafgård is a family owned business. These companies buy most of their frozen ingredients from specialist suppliers. Findus also freezes vegetables grown on contact straight basis. A third is the intermediary supplier, e.g. Food Impex in Helsingborg. They exports peas and wild berries and imports a wide variety of frozen vegetables, fruit and berries.

Global frozen food market is highly fragmented. The large multinational companies face intense competition from local companies in terms of their price offerings. Some of the leading companies (and potential futureOptifreeze partners) operating in the global frozen food market include

  • Amy’s Kitchen Inc.
  • Unilever Plc,
  • McCain Foods,
  • Maple Leaf Foods Inc.,
  • H.J. Heinz,
  • The Schwan Food Company,
  • ConAgra Foods, Inc.,
  • Nestle,
  • Tyson Foods Inc
  • Allens, Inc,
  • Ajinomoto Co. Inc.,
  • General Mills Inc,
  • Birds Eye Foods, Inc.,
  • Iceland Foods Ltd,

Europe is emerging as a leading market in frozen food and all aspects of correct hygiene in this business are critical:

Europe emerged as the leading regional frozen food market with over one third of the total revenue. Consumer’s reliance on high state of hygiene related to frozen food products had a positive impact on the regional market growth. Ref

The global refrigerated transport market is another indicator of the freezing industry’s great outlooks…

“The cold chain market in China is growing as it serves as a lucrative market for U.S.-based service providers for investment in cold chain infrastructure and also due to e-commerce and food safety regulations introduced by the Chinese government.

The global refrigerated transport market is growing at a considerable rate. In North America and Europe, refrigerated trucks, vans, and trailers are also witnessing a considerable growth in demand as they provide flexibility to deliver goods in multiple locations at flexible timings. Consumer demand fresh food through online shopping has also increased, which has triggered the increase in refrigerated transport by road. Reefer containers transported by sea are also contributing to the growth of refrigerated transport due to technological improvements which maintain the shelf-life of perishable foods.

Chilled, frozen, and deep-frozen are the temperature ranges through which products are stored and transported using a cold chain. The chilled products accounts for the largest share globally, as most fruits & vegetables are stored and transported through this chain. The frozen food market is also witnessing a substantial growth for the next five years

Globally, the meat & seafood market has the largest share, by application, followed by dairy & frozen desserts, and fruits & vegetables. The consumption of these perishable foods is increasing globally, thereby increasing the inter-trading of perishable foods among different countries.”

Frozen Potato. Letś also touch upon the general global outlook for one of Optifreeze’s potential applications – frozen potato. Today, CESI does not posses the competence or enough information from Optifreeze to estimate any relevance or potential impact within the frozen potato industry (the largest segment is logically french fries). However, it is interesting to highlight the trends within the business:

“Frozen Potato Highlights Exports of frozen potatoes from the world’s 3 leading suppliers,
at over 3.0 million metric tons, are up nearly 35 percent from 4 years earlier. U.S. exports are estimated at 1.0 million tons, up nearly 40 percent, on rising demand from Asian countries outside Japan. Tastes and preferences are changing in those markets, as a result of greater exposure to Western-style, fast-food restaurants. EU exports have skyrocketed 75 percent to an estimated 1.1 million tons. The bulk (nearly 4
0 percent) of that growth is driven by rising demand from the fast food sector in Saudi Arabia and other regional markets. However, the EU is also expanding globally to markets in South America and Asia.” (reference: page 2 here)

However, there are enormous theoretical opportunities within the dessert segment, primarily fresh frozen berry opportunities: “Frozen ready meals, including frozen pizza, desserts, snacks, entrees, etc., accounted for more than 30% of the total global market revenue in 2012 ($224.74 billion). Expected CAGR is 3.9% from 2013 to 2019. Frozen food made with natural and organic ingredients have shown huge market opportunity for manufacturers. (by foodproductdesign)

In addition, “alive deep freezed strawberries or spinage etc” are not available on the market today (that is fruits and veggies that can not survive freezing). With the Optifreeze technology (more info in original post) this might be possible in a near future…

optifreeze 2015-03-07 20:25:10

The frozen food growth driver “A Shift in consumer lifestyle towards ready to cook meals on account of lack of cooking time and hygiene is expected to remain a key driving factor for global frozen food market. Storage for longer duration is expected to increase shelf life of fruits and vegetables, which is also expected to have a positive influence on the market growth over the next six years. Availability of refrigeration media for commercial and industrial freezing is further expected to drive the global frozen food market.

The future of frozen food (Boardbia) The full report is very comprehensive, attached are a few conclusions:

 Re-inventing frozen food through innovative product and retail environments

  •  As more women enter the workforce and lifestyles change, global demand for frozen meals and ingredients will grow
  • This natural preservation allows food to be captured at its nutritional best. As awareness of the health benefits of specific nutrient rich food grows, consumers will look for easy ways to integrate these into their daily diets. Again, frozen food is uniquely placed to meet this growing need
  • The growing desire for convenience and the changing retail landscape will continue to have an impact on how, when and where people shop
  • Frozen food manufacturer, distributer and retailer, Picard, is leading the way in redefining frozen food and changing consumer attitudes about the category in France. Picard is one of a small number of premium frozen food brands in the world, and has few competitors even in Europe, where perceptions of frozen food have been improving. Innovative products and tailored marketing have helped the brand succeed with middle to high income consumers in a nation where good food is an essential part of the culture. The majority of Picard’s products have origins in French cuisine, though new lines are being added that tap into the growing desire for more ethnic and international foods.
  • In store tastings help bring its products to life for shoppers and introduce the smells of freshly cooked meals into the store. Every
    product in the shop has the name of the person who made it on the packaging.
    In the UK, frozen food manufacturer and retailer Cook is challenging the stereotypical image of frozen food by offering more premium, home made style family favourite
    foods. The boutique feel of its stores, with the use of warm colours, bunting, wood panelling and old
    fashioned signage reflects the authentic, rustic feel of its products.

Letś focus on the Optifreeze long term potential metrics. Of course, the latter is impossible, therefore CESI will present in total 3 separate approaches to extract roughly estimated potential trade values.

  • 1 The Strawberry approach
  • 2 The global and general food metrics approach
  • 3 Extrapolation of the “official Optifreeze 2017 target” approach

1 The Strawberry approach.  The straight forward and non complex approach. Until very recently, strawberries could not be frozen and thawed while keeping the cells alive. Therefore, the frozen strawberry / fresh strawberry market ratio should drastically increase within a very near future. This straight forward (and of course way to simple) Strawberry approach also excludes all other potential Optifreeze applications such as new product opportunities e.g. fresh frozen herbs, exotic fruits, deserts and cakes. Conclusion: If Optifreeze can secure 1 % of the 16.8 Billion SEK fresh strawberry market, this would correlate to a yearly trade value of 168 MSEK (based on the below attached European Fresh Produce association metrics). This first approach Strawberry approach was published in the original CESI Optifreeze blog post. Of course, the 1% estimation of market penetration over time is a wild prediction. The future number could be substantially lower or higher. However, the Optifreeze technology is patented, initially appreciated (Orkla) and unique.

2 The global and general food metrics approach. Optifreeze potential metrics calculated from global and general frozen food metrics assuming 0.1% market penetration within the relevant potential segments. Global Frozen food, a +2000 Billion SEK market and increasing. If we exclude frozen meat and fish/seafood from these numbers, frozen ready meals and frozen fruits and vegetables corresponds to a value of approximately + 1000 Billion SEK . Logically, within the big ready meals segment, Optifreeze might add and extract value of only a minor segment because a big piece herein correlates to pizza, nuggets etc. The combined total segments potato, vegetables, fruit and berries (roughly 15%) would translate to approximately 150 Billion SEK globally as a theoretical maximal number. Hence, a 0.1% market penetration (the wild speculative prediction) results in roughly a 150 MSEK trade value. Logically, CESI believes that all successful Optifreeze applications such as new product opportunities e.g. fresh frozen herbs, exotic fruits, desserts and cakes should be included in these numbers (a conservative approach?).

3 Extrapolation of the “official Optifreeze 2017 target” approach. In the memorandum p17 (Swedish language), Optifreeze states that the 2017 targets are 6 production lines (at one or a few customers). This should generate a turnaround of approximately 100 MSEK and a revenue of approximately 15-20 MSEK. These numbers could then provide guidelines for the continuation and growth of the business. If the 2015-2016 planned full scale production is successful, the turnaround and revenues growth might/should also have more of an exponential character, compared to a linear character (of obvious reasons).  Especially if /when new customers are announced. According to the memorandum, after setup of the full production, the partner(s) business network will enable the near future Optifreeze product pipeline to “reach a big share of the European market”. If the planned Orkla-Optifreeze launch is successful, how many production lines will this specific collaboration trigger in the second generation activity pipeline? 12? 24? If/when new customers are announced, how many production lines will that eventually trigger 6? 12? 24? Of course, CESI does not have a clue, but still speculates that the total number in 2019, 2020 might be high (50?).

Speculative conclusions might best be performed based on the extrapolation of the “official Optifreeze 2017 target” approach: If the critical 2015-2016 full scale production and launch outcome is successful, Optifreeze could likely and relatively quickly (due to the frozen food European and Global business structure) obtain a market cap in the “2 billion SEK region” (2018-2019, ~30 production lines, P/E ~25-30) . Time will tell.

Best regards, CESI

The author, Cutting Edge Science Invest, is currently an Optifreeze share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice.

Fruit, vegetables and berries lose flavour, shape and structure from freezing. This is because ice crystals formed during freezing causes the cells to “explode” resulting in immediate cell death. This event is particularly visually obvious for plants with soft structure, such as strawberries, but also applies to root vegetables such as spinach and lettuce. Most likely, you are also familiar with the sad appearance of your spinach or strawberries when retaining room temperature after long term storage in the freezer.

OptiFreeze AB has a patented CEPT technology that enables the taste, shape and texture of vegetables, fruit and Berries can be ensured through the freezing and thawing process. The technology opens up completely new markets and business opportunities for food industry companies and companies in freeze/refrigeration technology around the world. The result of the Optifreeze CEPT technology is that the cells of vegetables, fruits and berries incorporates natural antifreeze protein and sugars that keep the cells alive (!) through both the freeze and thaw process and thereby preserving the flavour, shape and texture. Today, there are no known direct competitors. C.E.S.I.´s initial concern was that no big player within the global food industry would be a sufficiently attracted prior to any product launch (proof of market concept). Now, the announced Optifreeze-Orkla ASA activities has removed this C.E.S.I. concern. There´s more than a single potential driver for the global food industry partner: Increased Quality, Less waste, Better access, New products and Lower Transportation Costs.

C.E.S.I. decided to learn more about the global strawberry market and surprisingly, the current trade value metrics are mind-blowing:

Strawberry in perspective “ Fact and figures in Europe and in the world”

  • According to European Fresh Produce association, the 2013 world´s total strawberry world´s trade value is roughly 16.8 Billion SEK (1.8 Billion Euro, page 8) and rapidly increasing.
  • Spain exports generate 4.8 Billion SEK (9.34 was applied as € – SEK currency converting factor)
  • Value growth of exports between 2008 and 2012 was 42% while volume growth was 18% on the same period

StrawExp

And from the European perspective: Intra EU trade ( shipment ):

EUStrawberry

Let´s scrape the surface of the current US market…

Commodity strawberry profile – By Hayley Boriss, Henrich Brunke and Marcia Kreith, Agricultural Issues Center, University of California, March 2006 (Updated May 2014 by Linda Naeve, Program Specialist, Iowa State University Extension and Outreach)

“Over the last two decades, the U.S. strawberry industry has experienced increased rates of consumption at a higher rate than other fruits and vegetables. Strawberries are the fifth most preferred fresh fruit in the United State. Year-round availability of fresh strawberries has significantly influenced their consumption by Americans. They nearly doubled their annual consumption of fresh strawberries since 2002, with per capita consumption rising to almost eight pounds (2012)”

“The drought that plagued California in 2013 is continuing in 2014 and affecting several crops. Industry estimates range from a half-million to 1 million acres of agricultural land in California likely to be affected by the current drought. The state’s governor, Jerry Brown, declared a state of emergency in January due to the lack of water. Timothy Richards, professor of agribusiness at Arizona State University believes between 10 and 20 percent of the supply of certain crops from the state could be lost. He estimates retail berry prices will likely rise by 21 to 43 cents per pound in 2014.Growers outside the Western U.S. are likely to offset shortages of strawberries, however, the industry’s traditional pattern of drawing supplies from different areas in response to local disruptions such as weather or disease is likely to be tested this time because of the magnitude of the California drought and the state’s dominance in the national supply.”

“Year-round availability of fresh strawberries has significantly influenced their consumption by Americans. They nearly doubled their annual consumption of fresh strawberries since 2002, with per capita consumption rising to almost eight pounds (2012). Annual per capita consumption of frozen strawberries remained consistent at 1.8 pounds in 2012. Although Florida produces about fifteen percent of the nation’s strawberries, it produces nearly all of the berries harvested in the U.S. during the winter months. However, Mexican strawberries also pour into the market during that time. Strawberry imports have risen from 198 billion pounds in 2010 to 302 billion pounds in 2012. Increased production and import of strawberries from Mexico may challenge the future of Florida’s strawberry industry, which showed a decrease in yield from 2011 and 2012. With the increase in production of fresh-market strawberries, the value of production increased due to higher fresh product prices. The total value of U.S. strawberry production in 2012 was over $2.4 billion. Fresh market 2012 market production value totaled just over $2.2 billion, while the value of processed strawberries was nearly $199 million.”

C.E.S.I. Conclusion: -Yes, the above attached data is in fact total market data primarily corresponding to today´s “conventional fresh berry market” simply because there has not been any alternatives – until now. If Optifreeze can secure only 1 % of the 16.8 Billion SEK market, this would correlate to a yearly trade value of 168 MSEK (based on the above attached European Fresh Produce association metrics). Furthermore, Optifreeze will likely establish a broad pipeline of various fruits, berries and vegetables. These parallel markets are also global…

Veggies, fruits stay fresh with new freezing method (youtube video)

What is CEPT?

CEPT is Closed Environment PEF Treatment. PEF is the abbreviation for Pulsed Electric Fields (PEF) or electroporation,  a technique that is routinely used, for example, in the introduction of new genetic materials into cells.

OptiFreeze is the result of a long period of research at the Department of Food Technology, Lund. The company was founded in 2011 by Arc Aroma Pure AB (also listed at aktietorget), LU Innovation and a number of researchers at the Department of Food Technology at Lund University. Operations are based on Skiffervägen in Lund the company conducts method and product development in-house and with partners. In the next few months, the company will, together with partners, industrialize the technology.

The breakthrough press release?

November 17, 2014 Optifreeze Press Release:

Orkla and OptiFreeze have signed an agreement under which Orkla will participate in the industrialization and commercialization of the OptiFreeze technology.

The goal is to implement a market test with treated products in 2015 and achieving large-scale production in 2016. The long-term cooperation agreement means that the parties will jointly contribute to industrialize and commercialize OptiCept ™ and Opticap ™. The goal is that frozen products treated with the OptiFreeze method will be tested on the market in 2015. This will be implemented before a major launch planned in 2016.

This agreement is a very important piece of the puzzle that has fallen into place in the efforts to industrialize and commercialize the company’s products. Orkla is a strategic partner that brings a lot of know-how in a number of important areas, says Fredrik Westman, President OptiFreeze AB. As we previously reported, the pilot tests conducted with Orkla terminated prematurely when the parties were pleased with the results. The collaboration has run very well, Orkla is a competent and important partner. I note that we have now taken an important step forward in accordance with the company’s strategy, while the agreement gives us the opportunity to implement other collaborations with some of the parties (ongoing discussions). These collaborations can be completely separate projects in other segments but also another company within the same project, says Pär Henriksson, Chairman OptiFreeze AB. OptiFreeze is working on several fronts and in discussions with potential international partners. The focus of the objective is to industrialize the company’s products, and find companies that have the capacity to handle the marketing, sales and support at the international level.

Orkla, General business information

Orkla ASA is listed on the Oslo Stock Exchange and headquartered in Oslo, Norway. Orkla is a leading supplier of branded consumer goods and concept solutions to the grocery and out-of-home sectors in the Nordic and Baltic regions. In addition, the Group holds good positions in certain product categories in India, the Czech Republic, Austria and Russia. The company is also a major supplier to the European bakery market. Orkla’s vision is to improve everyday life with healthier and more enjoyable local brands. As at 31 December 2013, Orkla had around 17,000 employees. The Group’s turnover in 2013 totalled NOK 33 billion.

C.E.S.I. Conclusion: Orkla seems to be a perfect match for Optifreeze. The successful Optifreeze-Orkla pilot test was a critical milestone for Optifreeze company.

Comments from the CEO Fredrik Westman (November 26, 2014, edited and translated by C.E.S.I.)

“In recent months we have made great progress and we are approaching one of the most important goals at a rapid pace; industrializing the OptiFreeze technology. Our products OptiCept ™ and Opticap ™ allows food industries making the impossible possible, namely to freeze products that normally do not tolerate freezing. Thus, we have the potential to transform the market for frozen vegetables, fruits and berries. The reason is that we have the knowledge and a unique technology to open new markets, products and business opportunities.

With our technology, sun-ripened fruits and berries in South America can be harvested at exactly the right time, cut into perfect pieces, frozen at the very same place and finally transported to the food, bakery and confectionery businesses and consumers around the world. Swedish berry companies can export red and sweet strawberries to the Swedish communities in North America. African vegetable and fruit growers are given the opportunity to refine and sell great products for example in Asia and Europe. Examples of opportunities are many and it has become increasingly evident that OptiFreeze has a technology that has the potential to change the conditions for growers, distributors, food processors and refrigeration technology companies, consumers, restaurants, pastry shops and bakeries. New types of products can be offered in new ways to new markets. Thus, we make it possible to add value and profitability in a variety of industries.

Since the last report, we have reached another important goal, namely signed an agreement with Orkla to cooperate closely where we jointly industrialize and commercialize the company’s technology. Having a reliable industrial partner who believes in OptiFreeze and our technology and its capabilities brings us even closer to industrialize the technology. The work has been flying start. Currently the company’s product and method developers are working together with, among other things, Pär Henriksson and Anders Boman at Arc Aroma Pure and several other people with the up scaling of the technology. The work is supported by knowledgeable and experienced people in OptiFreeze´s newly elected Board of Directors. Within a few months, we have built a team of employees, board members and partners.

Currently, we are evaluating a range of potential partners and strategies and we are well aware that the company has a technology that food industries and freezing technology companies are interested of. But we are also careful that future policy options are not closed. We do not want to rush off and give any actor great benefits without the shareholders and the company guaranteed to make a profitable deal in return. And a company that has the potential to transform the market for frozen products can afford to set high standards.

In Q3, the company completed yet another essential measure of the company’s strategy by completing what we call “tech transfer”, the transfer of technology from the university to the company, which means we are now engaged in the development of methodology in their own labs. During the quarter we invested quite a lot of money in lab equipment. In return, facilitated cooperation with our partners and we can focus more on development work faster leading to cash flow. Meanwhile, we have a fantastic collaboration with researchers at the Department of Food Technology at Lund University.

Now, we are continuing at a rapid pace so that we achieve our goals. In particular, we industrialize our technology so that we can sell the products. Because that’s basically the products in combination with the knowledge contained in OptiFreeze that can change the market and help us earn money.”

Hearing with the Optifreeze CEO Fredrik Westman and the chairman of the board Pär Henriksson (May 8, 2014, selected questions edited and translated by C.E.S.I., full version in Swedish here)

Alias Axl08: Hi! How does the company in five years?

Optifreeze: In 5 years we are a company that comprehensively focuses on methodology and technology to take us into new markets and be able to apply the method to new products. In 5 years we have become a famous brand in the food sector, from producer to consumer.

Alias Purfärsk: Is there anyone, as far as you know, who have tested similar technology to freeze food?

Optifreeze: No, we are not aware of any similar technology.

Alias Purfärsk: What is the biggest challenge for OptiFreeze the next two years?

Optifreeze: The biggest challenge is to scale up from pilot to full scale. And to strengthen the team. We are focused on the task and the company has a number of driven people who work hard.

“We will work hard to lift out the methodology and technology from the research environment to commercial application.

Alias jordgubben (edited/shortened question): ”I can understand that electroporation can reach the strawberry´s outer cell layers. Will the electroporation also reach the inner parts of the berry? After treatment, will then the berry be “totally perforated” or what is the outcome?

Optifreeze: It is not only the outer parts of the product that is treated. It is also the inner parts. In fact, it is easier to treat the inner part of the strawberry.

Alias jordgubben: Is the technique also applicable on fruits and berries that must be peeled (hesperidum)

Optifreeze: In principle, yes: If the peel is relatively thin. We aim to explore the technique on apples

Alias jordgubben: How does thickness and size of the substrate correlate to the  result of the treatment?

Optifreeze: In principle, size and thickness are of no relevance, but today we find the treatment simpler for smaller products. Currently, scale-up work is being pursued to enable treatment of larger products.

Alias jordgubben: You raised money in a share rights issue. How long do you estimate this money will last (May 8, 2014)?

Optifreeze: The money should last for approximately two years.

Alias Ess: What is the cost of treatment of 1 g of product? How much energy is consumed?

Optifreeze: Today, the cost is 1,5-8 SEK per kilogram and included is cost of compound (protein and sugars)

Alias Nyfiken: Many research companies remain in the lab for years. How will you avoid this and instead be successful in the market place.

Optifreeze: Already, we have started the productification work and aligned our work in a way that the company can start making money from sales of OptiCept and OptiCap. We have ”cut the umbilical cord” with the researchers at Faculty of Engineering LTH (Lund University), but we will continue our collaboration. Jointly, we will explore new applications and products. However, currently we focus on vegetables, berries and fruits of interest for the food industry.

Moderator: Is Optifreeze dependent of the Arc Aroma Pure´s CEPT-technique?

Optifreeze: No! There´s other providers of generators, but we benefit from having access to the competence provided by Arc Aroma Pure.

Moderator: Which OptiFreeze – Arc Aroma Pure collaboration opportunities and synergies do you see?

Optifreeze: Optifreeze is a company which focuses on chemistry and food. Product development will be in focus. Arc Aroma Pure is specialized in electronics and product development. We believe we will complement each other. Arc Aroma Pure is a more mature company, administration included, and the company has been listed (Aktietorget) for a longer time. Therefore, Arc Aroma Pure is also more mature in respect to leadership, quality and internal routines. Furthermore, the company is specialized within electronics and product development. Within all these areas, the companies can mutually benefit from collaborations.

Moderator: Can Optifreeze be classified as a GMO company (GMO = Genetically Modified Organism)? Thus, are the product´s genes modified?

Optifreeze: No, we do not modify the genes in the treated products.

Moderator: How will you secure that the market place won´t classify your products as GMO products?

Optifreeze: We capture all possible opportunities to inform about our methodology and at these occasions we also stress that our business is not about modifying genes.

Alias a: Who are your competitors?

Optifreeze: Conventional freeze technology and air transport of immature products. For example, there are a company that combines drying and freezing, but then water must be added during the thaw process. Today, we face no direct competition. In addition, we believe our patent portfolio is strong.

Alias a: Could you inform us about the company´s business- and revenue model?

Optifreeze: We will charge both for the treatment line entitled OptiCept and for Opticap that is the compounds, namely sugars and anti freeze protein. OptiCap will generate recurring revenues.

Alias Ess: Will you apply for a US version of the CE mark?

Optifreeze: Yes, that is for sure. However, this is a future plan.

Alias a: Have you industrialized the process? Have you demonstrated the process to be successful also in a non research lab environment?

Optifreeze: Currently and already, we have the capacity to treat products in kilogram scale. The planned pilot project will address scale-up in an industrial setting (2014-05-08 10:23) C.E.S.I.: IMPORTANT NOTE: The outcome of this pilot project was successful – Please see the full version press release attached above (November 17, 2014 Optifreeze Press Release: Orkla and OptiFreeze have signed an agreement under which Orkla will participate in the industrialization and commercialization of the OptiFreeze technology.)

Alias a: Are all necessary permissions already granted by Livsmedelsverket (National Food Agency)? (2014-05-08)

Optifreeze: We have had this discussion with specialists from a food industry company. Their conclusion is that no specific permissions are needed. The relevant question is if information should be printed on the product´s table of content. The added compounds are natural compounds and these are also used in other products such as ice cream etc.

Moderator: What is the cost of treatment (fruits, berries and vegetables)?

Optifreeze: We plan to charge 12000 SEK for the OptiCept™ cassette. One cassette is dimensioned for a range of 1.5-4 metric tonnes of product. This translates to an additional product cost range of 1.5-8 SEK / kilogram of product excluding capital- and cost of production.” (2014-05-08)

Note: Currently, C.E.S.I. does not understand the meaning of “capital-” in this stated phrase.

Alias jordgubben: Is there a risk that access to anti freeze protein will be limited and thereby a liability for Optifreeze?

Optifreeze: In the past, the access to antifreeze protein was limited, but currently both the usage and the access are increasing. Therefore, the price of anti freeze protein is rapidly falling.

Alias Ess: Will the company Arc Aroma Pure be a long term owner (also post the May 2014 share rights issue)?

Optifreeze: Yes.

Alias a: The Optifreeze methodology seems to aggressively increase cost compared to conventional freezing. How will your customers motivate this fact?

Optifreeze: – By increased quality, less waste, better access, new products and lower transportation costs. In addition, only a very small amount of compound is used per kilogram and the price of the compound is rapidly decreasing.

Moderator: Will the food industry increase the price on products that have been treated with your method? Will the end customer pay a higher price compared to today?

Optifreeze: Champagne and Swedish strawberries on New Year’s Eve! We believe a higher cost will be accepted. However, it is fundamentally impossible to answer this question today. Some products that today are conventionally freezed can potentially be replaced be replaced with our products/technology. But the primary driver for the food industry companies is new products to market, independently of the year´s season or geographical distance. It is these business opportunities that attract the food industry companies.

Alias a: Have you performed market research in the aspect of price sensitivity? What type of feedback is obtained regarding the increased cost (1.5 – 8 SEK / kilogram)?

Optifreeze: Yes, we have performed through market research and the food industry´s interest is strong. The food industry predicts that they can increase the number of products and also revenue.

Alias a: What is today´s number of employers? (May 8, 2014)

Optifreeze: One employed method- and product developer. A hard working board and several (paid) consultants.

Moderator: Which products can be treated with this method?

Optifreeze: We have performed sharp tests on spinach, strawberry and parsnip. Generally, the method is most successfully applied on vegetables, fruits and berries with homogenous structures.

Moderator: How large is the market for the Optifreeze products? Can the market be estimated in financial terms?

Optifreeze: It is impossible to estimate the market in financial terms. The only thing we do know is that food industry companies visualize business opportunities, because they can offer new markets and new products, but also old product in a new regime. We also know that there are new products out there waiting to be produced. We have a squared sheet of paper in front of us and on this paper only a few squares are currently filled.

Moderator: When will Optifreeze launch the first product (May 8, 2014)?

Optifreeze: The goal is to sell the first two CEPT platforms next year, 2015

Moderator: Who will buy the products? Who is the customer?

Optifreeze: A simple question but still hard to answer. The user is a food industry company holding a segment of freeze products or a company that desire such a segment. The customer might be the actual company but also a provider of production systems or freezing facilities or even a company within logistics that provides custom services

Alias jordgubben: Are the result affected by the actual freezing temperature?

Optifreeze: To some degree. Today, well-controlled industrial freezers must be used.

Moderator: Are there currently ongoing discussions with food industry companies and/or Freeze technology?

Optifreeze: We have very good contacts within both food industry companies and freeze technology companies. The feeling is very positive due to that a few companies actually have contacted us, not vice versa. These companies are curious and interested. We have had a live demonstration of the method and since the interest has grown even stronger.

Alias a: Will this technique replace current freezing technology or is it a complementary technology – a “niche technique” – that focuses on a specific area?

Optifreeze: Primarily, our technique is a complement but will presumably be a replacement in some cases, e. g. when immature vegetables, fruits and berries are air transported to customers. A relevant example is strawberries. Frozen strawberries are easily accessed, but the applications are limited due to the low quality of conventionally frozen strawberries. We want to change this fact.

Moderator: Is it the end customer that will thaw the products?

Optifreeze: Yes feels like the natural answer, but it could be the retailer that will thaw the products and subsequently sell them as fresh products.

Alias a: How do you define industrial scale? What is the capacity per machine?

Optifreeze: That depends on the customer, but more likely metric tonnes than kilograms.

Alias a: What is your estimated turnaround- and revenue growth in the next 2-3 years?

Optifreeze: In 2017, Optifreeze aim to have 6 OptiCept in production.

Alias a: Which are the greatest risks in the company and the strategy?

Optifreeze: Technical risks during scale-up, that the market will erroneously classify us as a GMO business, key persons that leave the company, funding and external world factors. In fact, a lot, but we are focused on our task.

Alias a: Will there be Optifreeze industries which will freeze products on demand or will you solely provide installations at the customer´s facilities (as the Nespresso-concept)?

Optifreeze: We will not hold own industries. We will solely sell installations and compounds, but as previously stated: We aim to become a method- and technology development company.

Alias a: What is your estimate of profit margin?

Optifreeze: Final price = Cost of production x 5 (C.E.S.I. : !).

Optifreeze patent family (2013):

Patent

Patentnummer                             Land

8 563 060                                     USA

2 201 084                                     Finland

2 201 084                                     Frankrike

60 2008 023 322.7                     Tyskland

2 201 084                                     Ungern

2 201 084                                     Italien

2 201 084                                     Holland

2 201 084                                     Polen

2 201 084                                     Spanien

2 201 084                                     Sverige

2 201 084                                     Schweiz/Liechtenstein

2 201 084                                     Storbritannien

Source: http://www.aktietorget.se/pressdocs/optifreeze/documents/optifreeze%20-%20memorandum%202014%20-%20final-1.pdf (p 25)

 

Financials:

OptiFreeze: Interim Report 2014-01-01 – 2014-09-30

Summary of Q1 – Q3 2014

The following summary covers the period 2014-01-01 to 2014-09-30 with comparative period 2013-01-01 to 2013-09-30.

  • Revenues for the period amounted to SEK 0 (0 EUR)
  • Profit for the period amounted to -1,847,168 SEK (-46 544 SEK)
  • Cash and cash equivalents amounted to 8,076,791 SEK of which 8,000,000 SEK in interest-bearing investment
  • Capitalized costs amount to 179 028 SEK (0 USD)
  • Number of shares amounts to 7,800,000 pieces
  • Earnings per share -0.24
  • Equity ratio 89.8%

Summary of Q3 2014

The following summary covers the period 2014-07-01 to 2014-09-30 with comparative period 2013-07-01 – 2013-09-30.

  • Profit for the period amounted to -802 374 SEK (-42 844 SEK)

Optifreeze: Further reading (In Swedish):

“Full original story” (Memorandum) http://www.aktietorget.se/pressdocs/optifreeze/documents/optifreeze%20-%20memorandum%202014%20-%20final-1.pdf

http://upbis.com/ag/pdf-analyses/optifreeze.pdf

Swedish television highlights Optifreeze (SVT): http://www.svt.se/nyheter/vetenskap/ny-frysmetod-for-gronsaker

http://bit.ly/H7Zn2c

The above attached SVT link can only be accessed from sweden (copywrite limitation)

http://optifreeze.se/

http://www.redeye.se/aktiebloggen/optifreeze-brannhet-nylistning

Further reading – Strawberries metrics 

http://www.fred.ifas.ufl.edu/pdf/webinar/Strawberry.pdf

Further reading – Spinach metrics

http://www.agmrc.org/commodities__products/vegetables/spinach-profile/

Best regards, CESI

The author, Cutting Edge Science Invest, is currently an Optifreeze share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

 

Introduction

Arc Aroma Pure develops a system, which has the potential to substantially improve efficiency of biogas production and reduce greenhouse gas emissions. Through the optimization of biogas production, more energy can be extracted from the organic material. However, let´s start to answer a few questions: What is biogas, how is it produced and why will greenhouse gas emissions be reduced using the Arc Aroma pure technology?

Biogas – Definition and climate benefits 

Biogas could be defined as “a mixture of methane and carbon dioxide produced by the bacterial decomposition of organic wastes and used as a fuel”. Biogas is a renewable fuel that is part of the natural cycle. Biogas consists mainly of 65 percent methane (CH4) and 35 percent carbon dioxide (CO2). Methane, CH4, is the high-energy main component of biogas. Methane is also a potent greenhouse gas with 20-25 times stronger greenhouse effect than carbon dioxide. The combustion of methane is carbon dioxide and water. The carbon dioxide released by the combustion of biogas is converted within nature’s own cycle

Biogas production

Most organic materials can be used for biogas production. A large percentage of these materials are in the agricultural sector in the form of manure from livestock and residues and waste from crop production

In a biogas plant this natural process is utilized. In this process, a material such as sewage sludge, manure, agricultural crops and food waste is placed or pumped into a digester, which is a completely airtight container. In some cases, pretreatment necessary for reception, pumping, mixing and degradation to function optimally.

The gas in the digestion chamber is normally saturated with water vapor. In addition to the biogas, a nutritious digestate is formed, which can be used as a fertilizing agent.

The anaerobic digestion process can be divided into three main stages; hydrolysis, fermentation and methane production.

In the first step, complex organic compounds are decomposed into smaller compounds such as sugar and amino acids by microorganisms and enzymes .

The second step is fermentation. During fermentation, a large a number of intermediate products are formed, including alcohols, fatty acids and hydrogen gas.

In the last step of the digestion process, methane gas is formed by an unique group of microorganisms.

Biogas applications

Biogas can replace fossil fuels and reduce CO2 emissions. Purified biogas can be used to power vehicles. The energy in the biogas can also be used for heating, either locally or through district heating networks. Another application is production of electricity, which may contribute to an increased proportion of green electricity into the grid. The fastest growing area of use is biofuel. Methane molecule can also be used as raw materials in manufacturing processes. Examples of products where methane may be included as raw materials include paints, plastics, furniture, feed and lubricating oils. (www.biogasportalen.se)

What makes Arc Aroma Pure a cleantech / greentech company?

Arc Aroma Pure develops a pretreatment facility that enables optimization of biogas production. In most biogas substrates, a major part of the nutrients are encapsulated (=hidden), which means that the digestion process is not optimally auto catalyzed. Thus, the digestion process will be slow. CEPT® acts directly at the cellular level and smashes structures which results in a faster fermentation process and a higher yield of released gas(es).

Furthermore, there is an unmet need from biogas manufacturers to use new substrates. A breakdown of the raw material at the cellular level opens the possibility of using new raw materials that have not previously been considered suitable for biogas production. In addition, there is further potential to use technology as a cool and energy efficient alternative to heat-based sanitation (cleaning of raw material for biogas production). The company’s main focus in the current situation is the efficiency of biogas production.

What is CEPT? CEPT is Closed Environment PEF Treatment. PEF is the abbreviation for Pulsed Electric Fields (PEF) or electroporation,  a technique that is routinely used, for example, in the introduction of new genetic materials into cells. The Arc Aroma Pure system is pre-installed in container modules to facilitate an easy connection to the customers´curent production lines (!).

Evaluation of the potential of CEPT®

In the fall of 2009, Arc Aroma Pure signed an agreement with a leading energy group on a jointly funded feasibility study. In 2010, the collaboration was extended and the Arc Aroma Pure technology was verified both in lab scale and process scale. The parties agreed that the technology can be used as a substitute for heat-based pasteurization. Laboratory experiments also showed that the technique can radically streamline the production.

During the fall of 2012, the parties completed the agreement with an appendix concerning a large-scale trial which is still active today. The major identified advantages were:

Energy efficient sanitation
More efficient digestion
A higher gas yield was observed.
The downtime of the process was also minimized
The investment as such was also minimized
The total process was optimized
The technology aided a continuous process (equals better utilization of capacity) utilization)
A desire to use new substrate was identified by (Pulp and paper industry)

arcaroma saving

About Arc Aroma Pure

Arc Aroma Pure AB was founded in 2008 after a long period of research and development for various applications based on electroporation. The management team consists of Pär Henriksson, CEO with extensive experience as an innovator and entrepreneur, Martin Hagbyhn former CEO Purac and Kockums and Anders Hättmark with extensive experience in business development and recruitment

The concept behind the CEPT is based on electroporation, a proven technology, used today in micro and molecular biology. It is a continuous process that act directly on cells and structures by short, pulsed electric field creates pores in the cell membrane and cell walls. This leads to the death of microorganisms and nutrients from different types of raw materials are released and become more readily available for digestion. The result is faster fermentation and a higher gas exchange.

Depending  on the substrate composition in the substrate, the Arc Aroma Pure CEPT® pre-treatment improves the methane production yield by 15–50 % (!). Additionally, the fermentation rate is increased allowing for the higher yield to be produced in shorter time than without a CEPT pre-treatment. This fact allows for the hold time in the reactor to be reduced allowing the plant to convert larger amounts of raw material to gas in the same timeframe. The target markets are biogas producers, technical consulting companies, wastewater treatment plants, universities and scientists plus a host of applications for other target markets. In 2014 there will be a global launch of the CEPT starting in the Nordics. 

Other identified and creative applications of Arc Aroma Pure clean technology – In ballast water treatment.

Ballast water treatment today is heavily discussed today, primarily due to that marine ecosystem are being mixed up. Alien marine species have been found in areas where they do not belong, which has led to disruptions including the fishing industries. This is a global concern. IMO classifies the above problem as fourth biggest threat of the oceans. This led to the convention “Control and Management of Ships’ Ballast Water Sediments” adopted in 2004. The Convention phases in purification methods (as required) with the start of the smaller boats in 2009. CEPT® treatment involves a biological treatment of pumpable products and therefore it can be used with great benefits as it is both energy efficient and also more environmentally friendly than alternative methods. This is due to that the purification occurs without heating of the water or addition of chemicals.

http://en.wikipedia.org/wiki/Ballast_water_discharge_and_the_environment

http://www.arcaromapure.se/?page_id=89

Other identified and creative applications of Arc Aroma Pure clean technology –  in Water and Food

In addition to the biogas application, the board believes that the CEPT® platform,will add value as an energy efficient alternative to biological treatment of liquid products. Heat is traditionally used in the purification / sanitizing processes, for example within water and liquid food. In this context, the process is called pasteurization. Pasteurization is a generic term for various techniques in which food is heated to a certain temperature for a certain time. This is performed with the aim to kill harmful bacteria and microorganisms. The CEPT® platform can perform this without heating, and this is called cold pasteurization. Cold pasteurization has great advantages over conventional pasteurization because the treated product is not affected in respect to either taste or texture. For example, CEPT® treated juice tastes just like freshly squeezed juice. Also protein-rich foods are interesting candidates for CEPT® treatment, as these can not be heat treated because proteins denature and solidify when exposed to heat. CEPT® technology ca also be applied in the purification of water. Contrary to heat based pasteurization, heat resistant effectively kill heat resistant microorganisms. Furthermore, cold pasteurization is significantly more energy efficient and cost effective in comparison to heat-based pasteurization. The supply of clean water is a growing problem in many parts of the world. The consequence is an increasing demand for environmentally friendly and cost effective water purification methodologies. Here, CEPT® could play a decisive role in the future as it is both environmentally friendly and cost effective. Why? The Arc Aroma pure technology is both energy efficient and avoids addition of chemicals. This is in contrast to the majority of water treatment options available on the market today.

Other identified and creative applications of Arc Aroma Pure clean technology – Optifreeze 

Arc Aroma Pure holds approximately 27 percent of the shares in another company, namely OptiFreeze AB. Pär Henriksson (CEO and director of Arc Aroma Pure) is the CEO of Optifreeze and Anders Hättmark is a Optifreeze director (and also a board member of Arc Aroma Pure).

OptiFreeze and the link to the Arc Aroma Pure technology could be summarized with the following points: Patent pending freeze technology that allows fruits and vegetables to retain their flavor and shape even after thawing. OptiFreeze AB apply the Arc Aroma Pure technique in its pre-treatment facilities and is thus dependent on the Arc Aroma Pure’s technology.

When fruits and vegetables are thawed after freezing, crystals grow so fast that the cell structure collapses. By controlling the fluid inside and outside the cells, the cell structures are safeguarded. The technique is based on the application of vacuum technology along with PEF treatment. The treatment enables cell survival, which in turn leads to that the food flavor, texture and quality will be maintained throughout the freezing and thawing process!

Arc Aroma Pure – The 2015 Vision

“In 2015 Arc Aroma Pure AB, will be a well known company in the region. CEPT® is a popular brand that stands for innovative and environmentally conscious relationship with customers and end users. “A pre-processing based on CEPT® platform will be the obvious choice for the efficiency of the biogas industry and Arc Aroma Pure will be a research-based and well-respected player in the global cleantech market. This will be achieved by the following Arc Aroma Pure activities: Development, manufacturing and marketing of a patented and ready to use CEPT®-line pretreatment of biogas industry substrates. In the following step, other applications and customer segments will be explored.”

Arc Aroma Pure’s CEO Per Henriksson very recently presented the company´s technology at “Gasdagarna” (October 22 to 23 in Båstad, Sweden). Gasdagarna was organized by the industry association Energy Gas Sweden. The event is aimed at companies and organizations in the field of energy gases, where biogas is an important part. The company also had a booth and presented the CEPT product. “The invitation was a result of the interest in the technology among biogas producers. Our presence in Gasdagarna will be an important step as we now entering a market, ” said Pär Henriksson, CEO, inventor and founder of Arc Aroma Pure.

 

Intellectual property, patent strategy and patent situation

Patent situation according to the low quality Arc Aroma Pure home page:

patent arc aroma pure

Arc Aroma Pure’s patent strategy is focusing on the generator construction design and its synchronization, and the treatment chamber to ensure a stable environment. The generator consists of several modules that are optically synchronized, these are constructed from available simple components. The treatment chamber is designed as a positive pump, which ensures a stable environment. This solution is scalable and can be customized as needed. Included in the patent is also a description of the method and a number of listed applications and substrates. Arc Aroma Pure intends to apply for additional patents in the event that the Board determines that the Company’s intellectual property protection can be further strengthened. A protected trademark (403,502) for CEPT® is also granted. The patents and the trademark is owned by Arc Aroma Pure.

However, recently it seems that a Isreal- ,Chinese-, European- and US- patent has been approved. 

https://www.avanza.se/placera/pressmeddelanden/2014/08/18/arcaroma-europeiska-patentverket-godkanner-patentansokan.html

http://www.sydsvenskan.se/ekonomi/lundabolag-far-europapatent/

https://www.avanza.se/placera/pressmeddelanden/2013/04/03/arcaroma-positivt-svar-fran-us-patent-and-trademark-office.html

https://www.avanza.se/placera/pressmeddelanden/2013/06/27/arcaroma-patent-beviljat-i-kina.html

https://www.avanza.se/placera/pressmeddelanden/2014/06/09/arcaroma-godkant-patent-och-bolaget-uppmarksammat-i-media.html

Per Henriksson, founder and president (translated and slightly edited by C.E.S.I!)

“I believe CEPT® will make biogas production more profitable and become independent from state aid and subsidies. The technique can also be used in decentralized production of smaller plants. It is my hope that previously unprofitable commodities can be used even without the need to invest in the costly generation II technology (gasification). In 2009 produced, approximately 1.4 TWh of biogas was produced in 229 facilities in Sweden. The industry has a relatively aggressive expansion plan, the “Vision 2020″, which states that Swedish biogas plants shall produce in total 20 TWh in 2020. To meet this goal, new substrates, which today are not profitable to use, must be successfully introduced. CEPT® smashes structures and releases nutrients. Therefore, we have high hopes that even some crops, algae, seaweed, and by-products from the forest industry can be used with the help of the CEPT® platform, which would represent a paradigm shift. In the leading biogas nation, Germany, a new biogas plant is started every eight hours. Sweden has a less honorable track record, but we have high hopes of being able to alter the development of biogas production, initially in Sweden and then internationally.”

http://www.arcaromapure.se/?page_id=33

A 2014 status report (the year´s key press releases translated, edited and summarized by C.E.S.I.)

  • February 11 ,2014: Arc Aroma Pure AB has signed an agreement on cooperation with Nordic Water Products AB (press release translated by C.E.S.I.)

Arc Aroma Pure and Nordic Water Products AB has for some months been performing pilot attempt at a wastewater treatment plant, where the two companies’ technologies are combined in order to see if we can achieve a heightened effect. The trials have been successful and full-scale test will therefore start in spring 2014 and last for about six months. The full-scale test is designed to verify the synergistic effects observed in the pilot tests. Currently, Arc Aroma Pure believes that the results may be published only after the full-scale test ended. If the results of the full-scale test is positive, the companies intend to enter an agreement which will state that Nordic Water Products AB will market and sell the combined technologies globally, through subsidiaries and distributors. Arc Aroma Pure’s CEPT® platform will then be included as a component in the combined technique.

Nordic Water Products AB develops and markets mechanical and engineering products and technologies for the treatment of water and wastewater to municipal and industrial customers worldwide. “We are very pleased that we have now reached the point where we can start full-scale tests. If the tests turn out well, we have a partner with a solid reputation in the global market. Nordic Water is an innovative company with several exciting products on the market. Working with a company such as Nordic Water, gives us credibility and access to a very extensive global marketing and distribution network, ” says Pär Henriksson, President of Arc Aroma Pure AB.

“Nordic Water sees great potential in the combined techniques with many applications in our segment wastewater. We are actively seeking new innovative Swedish technology and Arc Aroma Pure suits us well because the company represents innovation and curiosity,” says Göran Arnkil, Partner, Nordic Water Products AB.

https://www.avanza.se/placera/pressmeddelanden/2014/02/11/arcaroma-arc-aroma-pure-ab-publ-har-traffat-en-overenskommelse-om-samarbete-med-nordic-water-products-ab.html

  • April 15, 2014: Arc Aroma Pure AB has entered into an agreement for the evaluation and selling of CEPT® platform (press release translated by C.E.S.I.)

Arc Aroma Pure AB looks forward to working with BroGas, not least because the BroGas biogas plant is very well maintained and possesses great skills. Arc Aroma Pure will, in cooperation with BroGas, further develop the company CEPT® platform.

Meanwhile BroGas strive to increase the efficiency of biogas production. Together the companies will evaluate and analyze CEPT®-platform benefits of biogas production. It is also part of the agreement that BroGas will assist and participate in the visits and views for future customers and stakeholders. The plant will therefore be an important future demo site. In parallel, Arc Aroma Pure will own the right to use the built-in function for remote access to enable viewing of a facility in operation at the continued marketing. As compensation, BroGas has been offered a discounted price if the companies choose to implement a commercial business.

Normally, the Arc Aroma Pure pricing is based on a payback period of less than 36 months, which corresponds to the value generated by the pretreatment with CEPT® platform in terms of biogas production.

“I look forward to a good partnership and mutual benefit. BroGas feels like the right partner. I am confident that we will have a demonstration facility that attracts visitors, while BroGas simultaneously can streamline their biogas production and achieve better profitability. After conducting large-scale tests of a biogas plant in the southern part of Sweden, we have produced the first three industrial CEPT® platforms and it’s a big step forward for the company that we can now begin a collaboration with an additional reliable and professional partner”, says Pär Henriksson CEO Arc Aroma Pure AB.

Arc Aroma Pure AB has conducted large-scale tests of a biogas plant in southern Sweden and found that the platform will lead to tangible improvements in efficiency while the technology enables new substrates which can be used for biogas production. Furthermore, the tests suggest that, in the future, the CEPT® platform, may replace the expensive and energy-consuming heat-based sanitation. “We want to be at the frontier in terms of biogas production and we believe in the basic technology CEPT® platform is based upon. Therefore, we have high hopes that the installation will lead to a clear increase in biogas production, says Magnus Ahlsten, Chairman BroGas. The companies’ collaboration will start in April and commissioning of CEPT® platform is planned for 2014. The evaluation phase is expected to be completed in autumn 2014.

https://www.avanza.se/placera/pressmeddelanden/2014/04/15/arcaroma-arc-aroma-pure-ab-har-ingatt-avtal-om-utvardering-och-forsaljning-av-cept-plattform.html

  • May 13, 2014: Optifreeze in Swedish National Television: http://www.svt.se/nyheter/vetenskap/ny-frysmetod-for-gronsaker

(Optifreeze is utilizing the Arc Aroma Pure´s technology. Arc Aroma Pure holds approximately 30% of the shares in Optifreeze, see below for more information)

  • June 19, 2014: Industrial scale testing in collaboration with Swedish Biogas International AB (press release translated and summarized by C.E.S.I.)

Arc Aroma Pure AB and Swedish Biogas International AB has signed an agreement to conduct full-scale tests of the AAP’s CEPT® platform industrially at one of SBI’s biogas plants. These facilities are located in Lidköping, Örebro, Västerås and Jordberga. A first project meeting took place in week 25. The CEPT® platform will be evaluated in operation for about nine months. The agreement means that SBI is given the opportunity to take over CEPT® platform and paves the way for the installation of additional CEPT® platforms within the SBI Group. The board of Arc Aroma Pure estimates that revenues for the company in connection with the current cooperation with SBI can be generated beginning in Q4 2014.

With this agreement, the Arc Aroma Pure now reached the target to launch three pilot partnerships. The promotion will continue and be intensified.

“Arc Aroma Pure has achieved several important goals with the SBI agreement. Furthermore, the Arc Aroma Pure has now established another important reference facility and simultanously made agreements and begun deployment of all CEPT® platforms in the zero series. Commissioning of the three CEPT® platforms gives us several important reference objects where biogas producers and other interested parties can see and evaluate the platform in an industrial operation. The three reference sites provide further opportunities for Arc Aroma Pure to collect data that could be important to attach and highlight in the marketing. That is: Data that provide “proof” that our CEPT® leads to a significant increase in efficiency of biogas production”, says Pär Henriksson, President of Arc Aroma Pure AB .

https://www.avanza.se/placera/pressmeddelanden/2014/06/19/arcaroma-industriellt-fullskaliga-tester-i-samarbete-med-swedish-biogas-international-ab.html

  • August 14, Two CEPT® generators sold to OptiFreeze and cooperation agreements signed (press release translated and edited by C.E.S.I.)

OptiFreeze AB has ordered equipment from Arc Aroma Pure AB for a total value of 894 000 SEK. The order includes two CEPT® generators, a lab CEPT® and a mini-CEPT®. In addition, the parties have signed an agreement under which Arc Aroma Pure will provide consulting services and materials to the Optifreeze planned pilot plant.

The two ordered CEPT® generators, are simplified versions of the CEPT® generator used in the company’s pre-treatment container for biogas substrates. One of the generators is called lab-CEPT® and will be used in the laboratory for internal attempts at OptiFreeze. The second generator, entitled the mini-CEPT®, will be used in pilot experiments in food industrial environment.

The two generators will be delivered in the coming weeks. Arc Aroma Pure CEPT® generator is modular and can be delivered in different configurations, with capacities ranging from a few kW to several MW pulse power, which is adapted to customer needs. The Arc Aroma biogas or water treatment platform includes two powerful CEPT® generators. The CEPT® platform can be used in a wide variety of areas, some examples of interesting applications are pasteurization and increased extraction of juice or olive oil (C.E.S.I. prediction: juice= next press release!?)

In addition to the order of two CEPT® generators, the companies have entered into an operating agreement that will further build value on the earlier collaboration. The agreement means that OptiFreeze purchases consulting hours and materials of Arc Aroma Pure AB needed for the the construction of the pilot plant in Eslöv.

“Historically, the companies have had an extensive collaboration. The newly signed contracts concretize that collaboration. We consider OptiFreeze as an important customer, not least because of its potential, but also as an important partner and as an investment. Arc Aroma Pure is actively working on several fronts where biogas optimization is the main focus. We have very high hopes that our CEPT® technology will be well received in both biogas and water treatment area, but we also have prospective partners and customers in other application areas that we should explore and develop in the near future. The company faces a breakthrough“, says Pär Henriksson, President of Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/08/14/arcaroma-tva-cept-generatorer-salda-till-optifreeze-samt-samarbetsavtal-tecknat.html

  • September 5, 2014, Arc Aroma Pure has sold CEPT® equipment to Klippan Municipality (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB has sold CEPT® equipment to Klippan Municipality. The equipment is part of a pilot project run in conjunction with the municipality and Nordic Water AB. The purchase price amounts to 7 million, AAP co-finances the project with about 3 MILLION.

Arc Aroma Pure AB has reached an important milestone with the sale of CEPT® equipment to Klippan Municipality. The equipment included in the pilot project previously announced, the purchase price amounts to SEK 7 million. As a project participant is co-financing the project with AAP about 3 MILLION. Other partners and funders in the pilot is Nordic Water AB and Klippan Municipality. The Swedish Energy Agency is supporting the project.

“The purchase agreement is an important milestone in Arc Aroma Pure’s history and at the same time a great recognition of our technology. The project is located on the boundary between water treatment and biogas production, which is a huge market where our CEPT® technology has very good prospects. The wastewater treatment plants provides large amounts of sludge. This means great opportunities for our technology CEPT®, due to the fact that CEPT® processing has increased the capacity of the treatment plants and reduces the amount of residual sludge. Likewise, the amount of biogas produced will increase both in terms of yield and total amount“, said PO Rosenqvist, Chairman and Marketing Director at Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/09/05/arcaroma-arc-aroma-pure-har-salt-cept-utrustning-till-klippans-kommun.html

 

  • September 15, Arc Aroma Pure and Malmberg Water AB has signed an agreement (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB (AAP) and Malmberg Water AB (MWAB) have signed a cooperation agreement which states that MWAB will market and sell BioCEPT® biogas operators in a number of markets around the world. The agreement has a sales value of 50 million per year and the volume is expected to increase over time.

MWAB start their marketing efforts directly with the activities supported by the AAP in Sweden and abroad. MWAB currently has conducted nearly 100 plants for biogas upgrade in Europe and China. Biocept ™ is a natural supplement for MWABs catalog and marketing plan. The agreement also includes aftermarket and product development.

“Malmberg Water is an impressive partner who has shown tremendous growth in the segment of biogas. I am confident that this agreement will make a clear imprint in our sales figures. We now have the opportunity to partner with a company that has a long history and driven by a strong environmental commitment, combined with strong capabilities in several interesting segments. MWAB have shown a great deal of knowledge, insight, and not least, a great deal of enthusiasm about the opportunity to market our Biocept ™, “said PO Rosenqvist, Chairman and Marketing Director at Arc Aroma Pure AB.

“Now we can offer another innovative process solutions in water treatment and biogas, and it will be a great value to both our existing and future customers. Marketing of Biocept ™ is focused towards key customers and the signals we receive are positive. We are confident that CEPT® technology can contribute to a substantial optimization of biogas production and will be an important element in the construction of the energy neutral wastewater treatment plant”, says Per Johansson, Business Area Manager at Malmberg Water AB.

https://www.avanza.se/placera/pressmeddelanden/2014/09/15/arcaroma-arc-aroma-pure-och-malmberg-water-ab-har-tecknat-avtal-skall-marknadsfora-biocept-pa-den-globala-biogasmarknaden.html

  • October 23, Increased efficiency of olive oil production in Spain (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB (AAP) has teamed up with one of the world’s largest and most modern plants for the production of olive oil. A pilot based on CEPT® platform will be set up in the production plant in southern Spain. The agreement is a result of the experiments conducted in the laboratory, site visits and discussions held for over a year. Our Spanish distributor, Tasnord SL, has played a crucial part in the discussions and will be involved in the installation and the process in general.

Arc Aroma Pure AB, Tasnord SL and the Spanish producer has signed an agreement to install a pilot plant in the producer’s state of the art manufacturing plant for olive oil, a plant which is also one of the largest in the world. The parties have agreed on the establishment and initial attempts at AAPS laboratory has been implemented.

CEPT® platform has the potential to increase the amount of oil that can be extracted from the olives, CEPT® technology adds no heat, why olive oil volatile flavors are preserved and the quality is very high. AAPS and our partners hope that the method will increase the quality of the oil in general, but also that the method will increase the output share of the, higher market valued, extra virgin olive oil . Furthermore, it is likely that the CEPT® based process has the potential to accelerate the rate of production and that the technology is more cost effective than current production technology. The project is particularly interesting since the current production plant has a very high reputation and is considered as one of the industrys´best, resulting in many visits from industry colleagues.

“This agreement is a natural step forward for Arc Aroma Pure. Now, we have mainly finished our product for the biogas market. Now, Arc Aroma Pure is proceeding according to plan and explores a whole new market segment, the extraction of olive oil. The CEPT® platform is the same, but the application and the market segment is brand new. If the pilot is successful, we have an important reference that will interest the rapidly growing olive oil industry and also a possible future customer, due to the fact that there are a number of production lines in the plant that can be upgraded. I would like to thank the representatives of Tasnord SL and employees for the focused work that enabled this agreement.” Says Pär Henriksson, President of Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/10/23/arcaroma-effektivisering-av-olivoljeproduktion-i-spanien.html

  • October 24, Arc Aroma Pure announces rights issue, approximately 17.3 MSEK (press release translated and edited by C.E.S.I.)

Arc Aroma Pure will make a rights issue of approximately SEK 17.3 million and has received subscription commitments and letters of intent of approximately SEK 10.6 million, representing approximately 61 percent of the issue amount. It appears from a statement. Arc Aroma Pure’s current working capital is sufficient for the current needs over the next twelve months, but a capital contribution makes it possible to further increase sales and marketing efforts and simultaneously explore new application areas and market segments. The subscription price is 25:50 per B share. Each share carries one warrant, and 11 warrants entitle the holder to subscribe for one new share.

https://www.avanza.se/placera/telegram/2014/10/24/arc-aroma-pure-foretradesemission-ca-173-mln-kr.html

Arc Aroma Pure AB (publ.) is very active in the market and in different projects. We have chosen to release this memo to live up to our promise to be transparent and to keep our shareholders informed.

bioCEPT® deployed in Jordberga

Company bioCEPT® is now installed and commissioned at the biogas plant in Jordberga outside Trelleborg. The preliminary results are very promising and as expected. Our bioCEPT® in Jordberga will be an important demonstration facility now when we begin to receive both Swedish and foreign delegations, who expressed their interest to see the CEPT® plant in operation. The biogas plant in Jordberga is the largest and most modern plant for the production of biogas in Sweden.

bioCEPT® registered trademark

Now, the Patent Office has announced that bioCEPT® is a registered trademark. The registration is an important step in the company’s market strategy.

Marketing activities

Arc Aroma Pure representatives have visited prospective customers and partners in different market segments and in several countries. This includes visits to China, Thailand, India, Spain and the United States. We note that the hospitality is always very positive and that interest is also very large.

Successful tests in the olive oil project

Recently, the company installed a CEPT® generator, treatment chamber included, in one of the world’s leading facilities for oil production in southern Spain. The plant is probably the largest in the world and receives many visitors. The aim was to try CEPT® platform during full-scale production and to study how the technology can streamline the olive oil production.

Both the management of the facility and isiting experts were initially skeptical, but after a few hours of operation, it was obvious to everyone that the technology works. Thus, we have verified that the effect demonstrated in the laboratory is scalable. Oil quality improved significantly and the amount of high-quality olive oil that can be extracted increases by more than 10% after a CEPT® treatment. We now have a good basis for further discussions with olive oil producers and actors in the industry, discussions operated jointly with our partners TasNord.

Cooperation with AZTI Tecnalia

Arc Aroma Pure AB, while visiting Bilbao, laid the foundation for a collaboration with AZTI Tecnalia, Spain’s leading research institutes in “marinating and food”, “in the context of Sustainable”. We will cooperate with the objective of developing equipment and methods based on CEPT® technology and to help prospective customers with evaluation and decision-making.

Media attention

Pär Henriksson has been interviewed by a journalist from Helsingborgs Dagblad and Sydsvenska Dagbladet common industry editorial, 8till5 and a photographer has visited our company. On January 24  a major six slide article was published, where Arc Aroma Pure AB was highlighted with text and images. The text began with the words “The Lund Company Arc Aroma Pure was the Skåne company which had by far the strongest price performance last year. Shares traded on AktieTorget rose by 311 percent. ”

“In this memo, my colleagues and I tried to summarize some of what is happening in the company. As everyone knows, we can not tell you everything, which would violate various rules and ethics. I can summarize that the tempo is high and that we work focused. We are in the middle of the process to move from research and development to marketing and production. A process if not entirely easy, but we are going. ” Says Pär Henriksson, MD, inventor and founder of Arc Aroma Pure.


C.E.S.I. predicts that also another new application, extraction of Juice, might be announced in a near future press release (see the AAP´s hint in the previous Aug 14 2014, press release)

Note: Most of the information depicted above was obtained from http://www.arcaromapure.se

Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is an Arc Aroma Pure share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice.